It might finally be time to get readers to pay for website content
After his website’s ad revenue started to drop, Craig Seitam decided to switch to a subscription model. Along the way, he discovered one important truth: ‘It’s all fun and games until someone asks for a credit card number.’
It’s exactly one year since we transitioned CompetitionsGuide.com.au from a 100% free service to a paid subscription model.
Why would an established website make such a radical change after so many years of success? Visitation was as good as it had ever been. The answer is no surprise: like the majority of the online and offline publishing industry, revenues were flattening.
Our business model comprised mostly of sponsored listings, that is, companies or agencies paying us to achieve volume traffic through to their campaign. This was almost always on a cost-per-click or cost-per-lead basis. Google AdSense was also a significant earner, as it displayed extremely targeted competition campaigns to our members.
Hi Craig
This is a fascinating topic and I fully believe in the subscription model – I think it should be the backbone of every online business. It’s great that you took the plunge, and then modified. Most people would have given up after the 0.7% first go!
I think it’s different types of subscription for different businesses, if your content is a source of organic traffic then you wouldn’t want to paywall it all – but I DO see how a ‘content upgrade’ strategy could work for sure.
Well done for what you’ve achieved in such a short space of time and for being perceptive enough to see that your business model needed to change. It’s a brave step.
I have a question though: do you think you could now offer a higher tier membership to those people who are paying for the $3/month and loving it? Do you have a way to work out who are the most frequent/devoted users?
Rossco
Amazing story. Really pleased for you.
I did a bit of a double take, as it kind of implied that the principle improvements in the value proposition were getting rid of paid listings and getting rid of ads?
Was that all it was? Or was there something else?
If there was something else, how did the cost of that compare with the revenue hike?
And finally, of course, you don’t mention if it’s profitable….?
Hi Nick,
Thanks, appreciate it!
Removing paid content and ads was a significant factor in increasing subscription conversions, but this was only part of the equation.
I could write a chapter on conversion techniques that I know now, but didn’t then. But, everything keeps coming back to quality of content – if we drop the ball there, everything else is history.
Profitability-wise, I did mention that revenue rose by 42% in the back half of 2017. I should have referred to this as Gross Profit, as the figure is nett of both GST and merchant fees.
So yes, the move has been incredibly profitable.
regards,
Craig
Hi Rossco,
Thanks for the feedback! Our organic traffic has generally been above 60%. We don’t paywall the entire site, but we are extremely tight about the amount of content we give away for free. The more we give away, the less subscriptions, it’s that simple.
In terms of higher tier membership, it’s not something I can see at this stage. This is simply because aside from access to full content, there’s not much else that we have to sell our members.
Regards,
Craig
All I see is Join Free. I’d be mighty pissed off if I gave you my details to then find if I want what’s on the surface I’d have to pay for it without prior warning/knowledge.
Any mention of the Premium Services are buried in the Terms of Service without any mention of subscription rates, totally misleading and the faster our consumer laws catch up regarding online business models the better.
Also this:
(https://www.competitionsguide.com.au/about.asp)
“We don’t need or want your info – We don’t want your phone number, address or anything that should be considered private.”
This business model is so shifty.
Rant over.
Hi Stuart,
No problem with the rant, you’ve raised some good points. But I will take you up on the ‘shifty’ comment, as you’d expect me to.
Competitions Guide is free to join, and Standard Membership entitles a member to a small sample of competitions on the first page, which changes most days.
Our Terms of Use is quite brief and discusses the two types of memberships, but also on our FAQ page (https://www.competitionsguide.com.au/faqs.asp) the 3rd to 8th points are all about Premium Subscription. I just ran a check and our FAQ page was accessed 2,658 times in December, so it is getting read.
If a member joins and doesn’t upgrade, it costs them nothing, and we make nothing. We have no advertising or paid listings directed at Standard Members, and we send no 3rd party marketing emails.
In regards to the concern about personal information, we ask only for First Name, Email Address, Gender, State and Age Range. We don’t ask for Last Name, Phone Number or Address. We have absolutely no need for these. If a Standard Member doesn’t open our daily email in any 30 day period, it’s the last they’ll hear from us.
I hope this addresses the concerns you raised.
Regards,
Craig
I had assumed some time ago that the effect of large aggregators like FB was that small sites could not make money on advertising alone. Even the big news media have conceded as much.
Hi Investor,
It’s not just Facebook or Google that have been eroding paid revenue. Prior to going to Premium, sponsored marketing emails that we sent were getting less than half the click-through rates of 3 years prior. Plus, many of the competition campaigns making up our paid listings had been around for almost a decade, and were reaching saturation.
Regards,
Craig
Hey Craig, it’s been a long time! Great story. Thought you may be interested in reading up about http://dietdoctor.com. Andreas moved to a subscription model (US$9 per month) and is killing it with 40,000 members and 15 full time employees paid for entirely by the site.
https://www.dietdoctor.com/weve-passed-40000-members
Hi Matt,
Nice to hear from you, and always good to see a success story in the premium subscription arena!
Methods in the US don’t always transfer well into this market, but there’s always a clue or two that can be gained.
Thanks again,
Craig